Ever see a seller back out of a contract due to "Lack of funds"?

Asked by Chris Defeekio, Chicago, IL Fri Dec 21, 2012

Funny story. So I put an offer in on a condo and the seller accepted it, and we signed a contract, earnest money given, etc. So the seller is going through a divorce and him and his wife have extra properties under their names individually. The condo I was buying is under the husbands name only. So the husband and wife go to court to settle their affairs and husband gets screwed pretty big out of the divorce. Now the husband comes back and wants to back out of our signed contract because, he still needs 30k to pay the bank on top of our sale price. We want to sue for "Specific Performance" for backing out of the contract, but we will probably lose since the seller does not have enough money to cover the lack of funds. And my lawyer states we can not force the bank into a short-sale with this contract. It's the most ridiculous thing ever and I have a bunch of items purchased ready to move in. I don't see much options that we have other than walk away. Anybody ever see this?

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6
Seth Captain’s answer
Seth Captain, Agent, Chicago, IL
Fri Jan 4, 2013
Coming from somebody who really appreciates a good funny story, I have to tell you that I'm sorry. There is nothing funny about what happened, but to get even you might want to start courting the wife.

Otherwise, there isn't much you can probably do. I have seen other cases like this in Chicago, and I'm assuming elsewhere, since so many sellers are barely clearing their mortgage to sell their property, and they lack either basic arithmetic skills or nobody told them about commissions, attorney fees, closing costs, etc.

The other alternative, if you like the property enough, and your deal was a true steal, is to pay the difference owed, and maybe get a promissory note from the seller that he will wash your car for the next two years, or something.
0 votes
Bill J Delig…, Agent, Naperville, IL
Thu Jan 3, 2013
You are in the right to sue and go after the seller for specific performance, but at the end of the day is it worth the time. effort, and cost for what appears to be a very uncertain outcome. Get your earnest money back and try to find another opportunity.
0 votes
JIM Michaels, Agent, Chicago, IL
Fri Dec 21, 2012
Your attorneys answer was the answer
0 votes
Matt Laricy, Agent, Chicago, IL
Fri Dec 21, 2012
I actually have ran into this case before. The sellers didnt realize they had that many closing costs, so they screwed my buyer. You should talk with your attorney, but your options will be limited. You can probably take them to court, and you may win a small sum, but the costs of court will outweigh what you would win. Just a crappy situation. I am very sorry this happened.
0 votes
Manuel Brown, Agent, Chicago, IL
Fri Dec 21, 2012
Chris,

Speak to you attorney. It sounds like there was a meeting of the minds in the contract. Also, if attorney review had been meet with both parties it is a contract. The seller should have thought about the 30k he had to bring to the table long before any contract had been presented to him.

While I can imagine you are displeased, the question is as your attorney put it do you want to pay for additional attorney fees and additional aggravation where you will not know the outcome. It is totally up to you. Maybe just chalk this one up to a bad experience and better property may be headed your way.

Best of Luck and Happy Holidays,

Manuel Brown, Broker
iMove Chicago
0 votes
Philip Sencer, Agent, Chicago, IL
Fri Dec 21, 2012
Never, and your options are based on what the attorney states because this is a legal issue. I would think there 'should' be some sort of monitary compensation, but it's all about the law.
0 votes
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